Leave a Legacy

Kevin Spafford is Farm Journal’s succession planning expert for the Farm Journal Legacy Project.He hosts the nationally-televised ‘Leave a Legacy’ TV, facilitates an ongoing series of workshops for farm families across the U.S., and is the author of Legacy by Design: Succession Planning for Agribusiness Owners.

Not Minimizing the Estate Tax and Transfer Obligations

Oct 07, 2008

Continuing our look at the twelve most common mistakes agribusiness owners repeat, #9 reviews the difference between estate planning and comprehensive succession planning.

Forget the estate tax just for a moment - not that it doesn’t exist. It does and, depending on whose version of White House politics you believe, it will continue to pose a challenge for America’s agricultural community. But the imposition of estate taxes will not, in and of itself, destroy the family farm. In most cases, a competent estate planning attorney, financial advisor and CPA can help an agribusiness owner avoid, or at least minimize, the estate tax obligation.

Nevertheless, inadequate estate planning is still a major reason most farms do not pass to the next generation. That may sound ridiculous, given that most farmers have some form of estate plan, and there is no record of a single family losing their farm due to the estate tax. Yet, the burden of estate taxes and transfer obligations is not insignificant. The costs can be considerable and the need for cash can be crippling. Transferring the assets of an estate - real estate, business, personal or capital - can cost a substantial amount of money.

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Adam Nicholson 10/8/2008 04:00 AM

It is funny that the author of this post says in the same paragraph "inadequate estate planning is a major reason most farms do not [survive]" and "no record of a single family losing their farm due to the estate tax."
What is the failure of inadequate planning, if not the cost of the estate tax on the hard-working American farmers who are more interested in producing their crops than consulting with their attorneys?
Why should hard-working Americans have their livelyhood threatened by the Death Tax - only to be (possibly) saved by expensive attorney fees?
The Death Tax is immoral and should be repealed, and short of repeal, reduced to the lowest rate possible. Senator McCain supports lowering the estate tax rate to 15%. Barack Obama wants to keep it at 45%. Vote wisely this November.
Adam Nicholson
Director of Research
American Family Business Institute

Adam Nicholson 10/8/2008 04:02 AM

More information about the Death Tax - including stories of family enterprises that were sold to pay the Death Tax and voting records of members of congress - can be found on the American Family Business Institute's website:
www.nodeathtax.org